ERNST & YOUNG REPORTEDLY LAYS OFF 80; MORE CUTS SEEN

Laurie CohenCHICAGO TRIBUNE

Ernst & Young`s Chicago office has laid off dozens of professionals in the last week, insiders said Wednesday, despite repeated assurances from the recently merged accounting firm that it wouldn`t cut personnel.

Ernst & Young officials declined comment on the matter, but sources at the firm said as many as 80 staffers and managers have been told to leave by the end of this month, and more cuts are expected after tax-related work is completed on April 16. Some older partners also have been asked to retire, according to a top official at another local accounting operation.

Ernst & Young employed 1,365 professionals in Chicago at the end of last year.

''It`s basically numbers,'' one manager in the audit field said he was told on being dismissed last week. ''There wasn`t enough attrition as a result of the merger.''

The Chicago move represents the first sign that the merger of Ernst & Whinney and Arthur Young & Co., completed last October, will result in substantial layoffs. The merger created the largest accounting firm in the U.S.

Ever since merger plans were announced in May, officials of the two firms have said there would be enough work to support current employment levels. Many observers were skeptical, saying that some reductions were likely to eliminate overlap in the slower growing tax and audit fields.

It isn`t clear how many of New York-based Ernst & Young`s offices across the country have been affected. ''There are rumors (of layoffs) going on'' in different parts of the country, said Arthur Bowman, editor of an Atlanta-based accounting newsletter.

However, some accounting sources said the layoffs may not stem entirely from the merger. Many major firms have been trimming staff numbers in the last year because of slower than expected turnover, they noted.

More employees are staying at accounting firms because of relatively high salaries compared with similar jobs elsewhere.

Most of the Chicago layoffs so far have come in the audit field, sources at the firm said. Ernst & Young employed 605 audit professionals here at the end of last year, according to Crain`s Chicago Business.

The firm has hired the outplacement firm of Lee, Hecht, Harrison Inc., to help locate posts for some of those laid off, sources at Ernst & Young said.

Officials of Lee Hecht declined comment. It has also given some managers three months` severance pay.